When Bally’s won the competitive bidding process nearly three years ago to build Chicago’s first casino, it pledged to give minority investors a piece of the action as part of its agreement with the city.

This week, Bally’s Chicago launched an initial public offering for women and minorities to buy a 25% equity stake in the fledgling casino, looking to fulfill its obligation to the city and raise funds for the construction of its proposed $1.7 billion entertainment complex in River West, which is slated to open in September 2026.

But as applications begin to flow in through an online investor portal, work at the 30-acre site, home to what’s left of the former Chicago Tribune printing plant, remains halted after a demolition mishap last month that spilled debris from a wall into the adjacent Chicago River.

“Our goal is to start full-fledged demolition as soon as possible,” Chris Jewett, Bally’s senior vice president of corporate development, said Thursday. “It’s imminent.”

The river has since been cleaned up and Bally’s expects to resume and complete demolition this month, pending approval from the city. Construction will then begin with the installation of caissons as a foundation for the casino by early February, Jewett said. As the city’s new gambling mecca begins to rise, the IPO window will close for minority investors.

The $250 million initial public offering features four classes of stock ranging from $250 to $25,000 per share, enabling “underrepresented communities” to become investors in Bally’s Chicago. Qualified minorities can apply online through Jan. 31, with the offering expected to close on Feb. 7, according to the investor website.

Chicago-based Loop Capital Markets is managing the IPO, which is limited to women, Blacks, Asian-Americans, Hispanics and other “socially disadvantaged” people as defined by city guidelines. Investor groups interested in participating in the offering must also be controlled by women or minorities.

The investment is “highly risky,” with restrictions on future sale of the shares and cash distributions deferred for at least three years after the opening of the permanent casino, assuming it becomes profitable, according to the prospectus.

In May 2022, then-Mayor Lori Lightfoot selected Rhode Island-based Bally’s to build Chicago’s first casino, besting proposals from finalists Rivers Casino and Hard Rock. The Bally’s Chicago proposal includes an exhibition hall, a 500-room hotel, a 3,000-seat theater, 10 restaurants and 4,000 gaming positions, making it the largest casino in the state.

As part of the competitive process, the city required an equity component of at least 25% minority investment in their proposed casino.

Bally’s refined its initial minority investment plan, eliminating a heavily criticized call option allowing the casino to buy out the minority shareholders after six years. The final version creates 10,000 Class A shares valued at $25,000 each, including 7,500 shares offered at full price and 2,500 shares at three levels of lower prices, supplemented with loans by Bally’s Chicago.

The loans will bear an 11% interest rate, according to the prospectus. While Class A shareholders are not part of the agreement, investors backed by loans will not receive any cash dividends ahead of principal and interest repayment.

That means Bally’s Chicago not only has to be profitable, but it also has to make enough money to pay off the loans attached to lower-tier minority participants before they see any return on their investments.

The investor presentation, using results from other metropolitan casinos, projects annual gaming, hotel and restaurant revenues for the permanent Bally’s Chicago facility to range from $800 million to $1.2 billion per year.

Launched in September 2023 out of a temporary casino at Medinah Temple, Bally’s Chicago still has a long way to go to meet those financial goals.

The company has invested $70 million to convert the historic River North facility, once the home of the annual Shrine Circus, into a temporary casino with about 1,000 gaming positions. Last year, it generated about $115 million in adjusted gross receipts through November, according to Illinois Gaming Board data.

Bally’s Chicago is tied for third in revenue and ranked second in admissions behind Rivers Casino Des Plaines among the state’s 16 casinos through 11 months last year. But its revenue has been essentially flat since peaking in May.

In September, Bally’s brought in Travis Hankins, longtime general manager at its Quad Cities property, to run the Chicago casino, replacing Mark Wong, who shifted to Bally’s Kansas City.

The city projected Bally’s would generate nearly $243 million in adjusted gross receipts at the temporary casino last year, yielding about $35 million in local gaming taxes. December revenue has yet to be released by the Gaming Board, but Bally’s Chicago is on pace to fall far short of those projections.

Longer term, Chicago is counting on Bally’s to create a tourist magnet and profit center, generating $200 million in projected annual tax revenue for the city. There are some promising signs that opening the permanent casino could provide a significant boost to Bally’s Chicago, its investors and the city.

Wind Creek Chicago Southland, a new casino which opened Nov. 11 in the south suburbs, generated big numbers during its first three weeks of operations in November, boosting statewide casino revenue to its best month of the year. Hard Rock Rockford saw its monthly revenue and admissions jump from the middle of the pack to near the top after moving from a temporary facility to a $300 million permanent casino in late August.

However, getting the permanent casino off the ground has already presented some challenges for Bally’s Chicago.

Last year, Bally’s had to relocate its planned hotel tower, which was shifted from north of the casino to the south after it was determined that driving caissons into the ground might damage municipal water management infrastructure pipes along the river.

In July, one week after booting the Tribune and taking possession of the Freedom Center, Bally’s announced it had obtained $940 million in financing to supplant the printing plant with the planned casino complex, assuaging concerns it didn’t have the wherewithal to build it.

Demolition began in late August, but work ground to a halt on Dec. 14 when a crane knocked down a low wall on the southeast end of the former printing plant, spilling perlite, a volcanic glass used in construction, into the river. Videos and photos of the incident were shared widely on social media.

“We had all the safety precautions with the netting and all that,” Jewett said. “It just came down a little bit different than we expected.”

Jewett said the material has been cleaned up, engineers have come up with a new strategy for tearing down the rest of the wall and a large barge remains docked by the building as a backstop debris-catcher in case anything goes wrong.

Bally’s is waiting for the city to give the green light for demolition to resume, he said. With only 5% of what had once been the largest newspaper printing plant in North America still standing, the Freedom Center could be completely gone within weeks, Jewett said.

Minority investors willing to roll the dice that all the pieces fall into place for Bally’s Chicago can apply for an ownership stake at www.ballyschicagoinvest.com/offerings. But a careful perusal of the prospectus reveals yet another risk as President Trump is set to take office for a second term.

Citing Trump’s threats to impose new tariffs on goods imported from China, Canada and Mexico, Bally’s Chicago warned the cost of constructing the permanent casino could significantly increase.

How much? Apparently enough to sink the entire project into the Chicago River.

“To the extent we determine our costs to develop our permanent resort and casino are too high, we may suspend, reduce the scope of or permanently abandon the implementation of our plans with respect to our permanent resort and casino, which could have material and adverse effects on our plans and strategic initiatives,” Bally’s Chicago said in the prospectus.

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